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> Wait, they didn't exercise their options into the sale? What does this mean exactly?

• nextweek2 8y ago
  If you’re given share options they can be worthless after the acquisition is complete. I’m not sure exactly how because it’s legal and accounting practice. Hence the lawsuits. If you have share options and you catch wind of a buyout, exercise (buy) the shares. That’s when you have a stake in the game. You have to remember that the company that issued the options won’t exist (in the same form) once acquired, the options become worthless. Sometimes they’ll throw you a bone but that’s usually the bare minimum of what they can get away with.
  • pjc50 8y ago
    Yes, but the options may be out-of-the-money at this time, and it costs real money to exercise them and may have tax implications.
• DanielGee 8y ago
  Simply put, options are an option to buy shares at a specified price sometime in the future. For example, a company can give you options to purchase X amount of shares at a ridiculously cheap price ( like $0.0005 per share ). Many startups do this. Sometime in the future, you can exercise the option and get X amount of shares. If you don't exercise the option, then you don't get to buy shares at the agreed at price.